Commitment to Disciplined Capital Allocation
HOUSTON--(BUSINESS WIRE)--
Phillips 66 (NYSE: PSX), an energy manufacturing and logistics company,
announces its 2018 capital budget of $2.3 billion, which includes $1.4
billion of growth capital and $0.9 billion of sustaining capital.
“The 2018 capital program demonstrates our commitment to disciplined
capital allocation and operating excellence,” said chairman and CEO Greg
Garland. “We continue to make sustaining capital investments to maintain
the integrity of our assets and ensure safe, reliable and
environmentally responsible operations. Our growth budget promotes value
through investment in capital projects offering attractive returns.
Long-term, we continue to target re-investing 60 percent of our cash
flow back into the business and returning 40 percent to our
shareholders.”
In Midstream, Phillips 66 plans to invest $1.2 billion, including $1.0
billion of growth capital, in its Natural Gas Liquids (NGL) and
Transportation businesses. The company is developing growth projects
integrated with its existing assets and infrastructure, such as ongoing
expansion of the Beaumont Terminal, additional Gulf Coast fractionation
capacity, and investment in pipelines and other terminals.
Midstream capital includes budgeted spending of $595 million by Phillips
66 Partners, with $85 million directed toward maintenance. Growth
capital at the partnership will support organic projects, such as the
Sand Hills Pipeline expansion, completion of the Bayou Bridge Pipeline
eastern segment, and an isomerization unit at the Phillips 66 Lake
Charles Refinery.
Phillips 66 plans $827 million of capital spending in Refining, with
$541 million for reliability, safety and environmental projects.
Refining growth capital of $286 million is for small, high-return, quick
payout projects primarily to increase clean product yields. Projects
include completion of the fluid catalytic cracking (FCC) unit
modernization at the Bayway Refinery and FCC optimization at the Sweeny
Refinery.
In Marketing and Specialties, the company intends to invest $140 million
of growth and sustaining capital. The growth investment will further
increase retail sites in Europe.
In Corporate and Other, the company plans to fund $116 million in
projects, primarily related to information technology and facilities.
Phillips 66’s proportionate share of capital spending by joint ventures
Chevron Phillips Chemical Company LLC (CPChem), DCP Midstream, LLC (DCP
Midstream) and WRB Refining LP (WRB) is expected to be $946 million.
Including these equity affiliates, the company’s total 2018 capital
program is projected to be $3.2 billion.
In Chemicals, Phillips 66’s share of CPChem’s 2018 capital expenditures
is expected to be $398 million, a decrease of about 45 percent from 2017
due to completion of the U.S. Gulf Coast Petrochemicals Project. The new
polyethylene units included in this project started up during the third
quarter of 2017, while commissioning of the ethane cracker at the Cedar
Bayou facility is expected to begin in the first quarter of 2018.
Phillips 66’s expected share of DCP Midstream’s 2018 capital spending is
$405 million, with $350 million targeted for growth projects including
the Sand Hills Pipeline expansion and two DJ Basin gas processing
plants. The company’s expected share of WRB’s capital expenditures is
$143 million, and includes completion of the Wood River Refinery FCC
unit modernization to increase clean product yield. Capital spending by
these three major joint ventures is expected to be self-funded.
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Millions of Dollars
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Sustaining
Capital
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Growth
Capital
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Capital
Program
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Midstream
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Phillips 66
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$
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133
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490
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623
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Phillips 66 Partners
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85
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510
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595
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218
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1,000
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1,218
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Chemicals
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-
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-
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-
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Refining
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541
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286
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827
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Marketing and Specialties
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65
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75
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140
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Corporate and Other
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116
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-
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116
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Phillips 66 Consolidated
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940
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1,361
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2,301
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DCP
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55
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350
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405
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CPChem
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247
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151
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398
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WRB
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77
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66
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143
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Selected Equity Affiliates
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379
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567
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946
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Total Capital Program
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$
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1,319
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1,928
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3,247
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About Phillips 66
Phillips 66 is a diversified energy manufacturing and logistics company.
With a portfolio of Midstream, Chemicals, Refining, and Marketing and
Specialties businesses, the company processes, transports, stores and
markets fuels and products globally. Phillips 66 Partners, the company's
master limited partnership, is an integral asset in the portfolio.
Headquartered in Houston, the company has 14,600 employees committed to
safety and operating excellence. Phillips 66 had $53 billion of assets
as of Sept. 30, 2017. For more information, visit www.phillips66.com
or follow us on Twitter @Phillips66Co.
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This news release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, which
are intended to be covered by the safe harbors created thereby. Words
and phrases such as “is anticipated,” “is estimated,” “is expected,” “is
planned,” “is scheduled,” “is targeted,” “believes,” “continues,”
“intends,” “will,” “would,” “objectives,” “goals,” “projects,”
“efforts,” “strategies” and similar expressions are used to identify
such forward-looking statements. However, the absence of these words
does not mean that a statement is not forward-looking. Forward-looking
statements relating to Phillips 66’s operations (including joint venture
operations) are based on management’s expectations, estimates and
projections about the company, its interests and the energy industry in
general on the date this news release was prepared. These statements are
not guarantees of future performance and involve certain risks,
uncertainties and assumptions that are difficult to predict. Therefore,
actual outcomes and results may differ materially from what is expressed
or forecast in such forward-looking statements. Factors that could cause
actual results or events to differ materially from those described in
the forward-looking statements include fluctuations in NGL, crude oil,
and natural gas prices, and petrochemical and refining margins;
unexpected changes in costs for constructing, modifying or operating our
facilities; unexpected difficulties in manufacturing, refining or
transporting our products; lack of, or disruptions in, adequate and
reliable transportation for our NGL, crude oil, natural gas, and refined
products; potential liability from litigation or for remedial actions,
including removal and reclamation obligations under environmental
regulations; limited access to capital or significantly higher cost of
capital related to illiquidity or uncertainty in the domestic or
international financial markets; and other economic, business,
competitive and/or regulatory factors affecting Phillips 66’s businesses
generally as set forth in our filings with the Securities and Exchange
Commission. Phillips 66 is under no obligation (and expressly disclaims
any such obligation) to update or alter its forward-looking statements,
whether as a result of new information, future events or otherwise.
The disaggregation of capital spending between sustaining and growth is
not a distinction recognized under generally accepted accounting
principles in the United States. The company provides such disaggregated
information to demonstrate management’s return expectations with respect
to capital spending.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171208005517/en/
Source: Phillips 66